Winners & Losers

Return to Article

Energy Winners & Losers: Sunoco

The Associated Press

In electronic trading on Tuesday, crude oil prices fell to a new low of $46.82. Crude prices have tumbled since mid-summer record highs, shedding more than two-thirds of its value.

Gasoline prices have fallen for the 20th week since the July 4 holiday to a new three-year low of $1.811 per gallon, according to the government's Energy Information Agency.

Shares of Holly (HOC) fell 48 cents, or 2.8%, to $16.27. Sunoco (SUN) shares slid 20 cents, or 0.5%, to $35.

On the flip side, Frontier Oil (FTO) and Valero Energy (VLO) both saw their shares rise more than 6%. Frontier shares rose 81 cents, or 8.4%, to $10.47, and shares of Valero lifted $1.15, or 7%, to $17.38.

Jim Byron, an analyst with BMO Capital Markets, on Tuesday downgraded the independent refining sector to "Underperform" from "Market Perform," citing an erosion in gasoline demand, driven by a drop off in vehicle sales, restraint in vehicle usage, rising unemployment, the credit crisis and the potential failure of the U.S. auto industry.

Automobile and light-truck sales dropped 34% in October, vehicle miles traveled declined for the first time in 25 years, and the American Trucking Associations' tonnage dipped 6% in the past four months, Byrne said.

"The fact that most of these data points are still from September and October and the situation has vastly shifted since then does not paint a pretty picture for 2009 demand," he added.

Byrne lowered Sunoco Inc.'s rating to "Underperform" from "Market Perform" and assigned it a $30 price target. He also rated Alon USA Energy (ALJ) and Western Refining (WNR) at "Underperform." Shares of Alon added 12 cents to end at $8.76.

Meanwhile, Western Refining shares gained 18 cents, or 2.8%, to close at $6.70. Byrne held his "Market Perform" rating for Frontier Oil, Holly, Tesoro (TSO) and Valero. Shares of Tesoro rose 53 cents, or 6.7%, to finish at $8.42.